In a diversity action,
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a federal district court in Illinois has personal jurisdiction over a party if an Illinois state court would have personal jurisdiction. Heritage House Restaurants, Inc. v. Continental Funding Group, Inc., 906 F.2d 276, 279 (7th Cir. 1990). Under the Illinois long-arm statute, non-residents are subject to the jurisdiction of the Illinois courts if their conduct falls into one of several categories. The relevant provisions of the statute state:

(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person . . . to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any such acts:

(1) The transaction of any business within this State;

. . .

(7) The making or performance of any contract or promise substantially connected with this State;

. . .

(f) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him or her is based upon subsection (a).

735 ILCS 5/2-209(a)(1)(7)&(f). Moreover, even if jurisdiction exists under the long-arm statute, a court must determine whether the exercise of personal jurisdiction would meet the requirements of constitutional due process. Heritage House, 906 F.2d at 279.
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These initial factors weigh against the exercise of personal jurisdiction by this Court. In the instant case, it is undisputed that McDonald's initially contacted Mr. Bukele and Servipronto to enter into these licenses due to the difficulties it had encountered with the previous licensee. Bukele Aff. 9/16/ 96 P 6. In addition, all three license agreements were negotiated and executed in El Salvador. Id. P 4. Furthermore, performance of the agreements was to take place primarily in El Salvador. In fact, even the payments that Servipronto made to McDonald's were deposited in a bank account maintained by McDonald's in San Salvador. Id. P 9. The only part of these agreements that had anything to do with Illinois is the fact that McDonald's is located here and may have performed its part of the contract in Illinois by providing advice and support from its Oakbrook headquarters. This fact, however, is irrelevant because the inquiry focuses on what Bukele did in Illinois and not what McDonald's did. See Asset Allocation and Management Co. v. Western Employers Ins. Co., 892 F.2d 566, 569 (7th Cir. 1989).

Other considerations also argue against jurisdiction over Mr. Bukele. All three licenses specify that El Salvadoran law will govern their interpretation. Although a choice of law provision standing alone cannot grant or defeat jurisdiction, it may be considered as part of the analysis. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 482, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985); Hedge Associates, Inc. v. Ferraz Corp., 1996 U.S. Dist. LEXIS 859, No. 95 C 4042, 1996 WL 37680, at *5 (N.D. Ill. Jan. 26, 1996). Moreover, several of the contacts and visits which Mr. Bukele had with McDonald's personnel in Illinois, see Hadland Aff. PP 4-13, occurred either before Servipronto became the licensee or in Mr. Bukele's capacity as president of Servipronto. Personal jurisdiction cannot be based on these actions because Mr. Bukele is being sued individually, and he "must be distinguished from the corporation of which he is an officer and a majority shareholder." Berg v. Anderson, 1995 U.S. Dist. LEXIS 11419, No. 95 C 1664, 1995 WL 476671 at *5 (N.D. Ill. Aug. 8, 1995). The fiduciary shield doctrine, which prevents the exercise of personal jurisdiction over a defendant based solely on his contacts with Illinois as a fiduciary of a corporation, bars the Court's consideration of Mr. Bukele's conduct in that role. Olinski v. Duce, 155 Ill. App. 3d 441, 508 N.E.2d 398, 400, 108 Ill. Dec. 237 (1st Dist. 1987). Hence, any contact that Mr. Bukele had with McDonald's personnel prior to 1978 and those contacts which were made on behalf of Servipronto may not be considered.

Nevertheless, Mr. Bukele, individually, has had contacts with and made visits to McDonald's personnel in Illinois. In 1981, he travelled to Oakbrook and met with officials of McDonald's to seek a reduction in royalty payments and other alterations in the licenses for the restaurants. Hadland Aff. P 8. That meeting led directly to a letter agreement, which Mr. Bukele signed individually and on behalf of the corporation, modifying certain terms of the licenses.
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McDonald's Resp. Ex. C. No. 7. Furthermore the 1989 agreement, in which Mr. Bukele again was acting both on behalf of the corporation and individually, provided that the newly relocated restaurant's physical construction and design would be in accordance with plans that McDonald's previously had approved. Id. Ex. C No. 4. It also required that Mr. Bukele and Servipronto generally be in full compliance with all the terms of the licenses. This agreement is directly related to McDonald's present suit because McDonald's terminated the licenses based on the failure of Servipronto and Mr. Bukele to bring the restaurants up to McDonald's specified standards.

For similar reasons, the 1978 license agreements and the subsequent letter agreements which modify them are contracts that are substantially connected to Illinois. Although aspects of the solicitation, negotiation, execution and performance of these contracts occurred outside of Illinois, these contracts created long-term obligations between Mr. Bukele and McDonald's. Not only were these extended obligations, but they also were obligations which further intertwined Mr. Bukele and McDonald's. McDonald's was involved in a supervisory role over many of the business activities of Mr. Bukele's restaurants, and the licenses required that Mr. Bukele seek McDonald's permission, which he did on several occasions as evidenced by the 1981 and 1989 letter agreements, to make any changes in the restaurants' operations. Therefore, I also find that Mr. Bukele's actions are covered by Section 2-209(a)(7) of the long-arm statute.

D. Cause of Action Based on Defendant's Conduct

In order to base specific personal jurisdiction on the acts of a non-resident defendant, the plaintiff's cause of action must arise from those acts. See Heritage House, 906 F.2d at 281. In other words, the claim must "lie[] in the wake of the commercial activities by which [the] defendant submitted to the jurisdiction of the Illinois courts." Deluxe Ice Cream Co. v. R.C.H. Tool Corp., 726 F.2d 1209, 1215 (7th Cir. 1984) (quoting Loggans v. Jewish Community Ctr. of Milwaukee, 113 Ill.App.3d 549, 557, 447 N.E.2d 919, 925, 69 Ill. Dec. 484 (1983)). The conduct of Mr. Bukele meets this standard.

First, the clauses of the licenses that Mr. Bukele personally guaranteed are relevant to the present controversy. Mr. Bukele argues that McDonald's claims only arise from the termination clause of the license. Although the termination clause grants McDonald's certain rights upon the termination of the licenses, the reasons for McDonald's invocation of the termination clause are due to Mr. Bukele's alleged failure to comply with those clauses of the license which he guaranteed personally. These clauses are part of the overall relationship between Mr. Bukele and McDonald's and therefore are located in the "wake" of his conduct which created a continuing and extensive link between himself and McDonald's. See Deluxe Ice Cream, 726 F.2d at 1215.
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Mr. Bukele's other conduct which is connected to Illinois, namely the modification of the licenses by means of the 1981 and 1989 letter agreements, also gives rise to McDonald's claims. Both of these agreements were signed by Mr. Bukele individually. Although McDonald's is not suing Mr. Bukele directly on these letter agreements, they comprise part of the ongoing relationship in which these two parties were enmeshed. "The relationship between the transaction and the claim is particularly strong where there is an ongoing business relationship between an out-of-state defendant and a resident corporation," Heritage House, 906 F.2d at 281. Hence, McDonald's claims do arise from Mr. Bukele's transactions in Illinois.

E. Due Process

The final step in the personal jurisdiction analysis is to determine whether the exercise of jurisdiction over a non-resident defendant would comport with due process. See John Walker & Sons, Ltd. v. DeMert & Dougherty, Inc. 821 F.2d 399, 404 (7th Cir. 1987). The due process inquiry has two parts. First, the defendant must have "purposely established 'minimum contacts' in the forum State.'" Burger King, 471 U.S. at 474 (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945)). These minimum contacts must "result from actions by the defendant himself that create a 'substantial connection' with the forum State." 471 U.S. at 475 (citations omitted). The defendant's connection to the State must be substantial enough that "he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980).

In this case, Mr. Bukele has established minimum contacts with Illinois. Mr. Bukele entered a twenty year franchise agreement with a resident corporation, negotiated and executed modifications to that agreement, and directed communications to Illinois through the telephone and mail. Accordingly, he "has created 'continuing obligations' between himself and residents of the forum," and therefore "it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well." Burger King, 471 U.S. at 476.

Although Mr. Bukele does have sufficient minimum contacts with Illinois, the Court, in the second part of the due process inquiry, must consider if, in light of those minimum contacts and some other considerations, the exercise of personal jurisdiction would offend "'traditional notions of fair play and substantial justice.'" International Shoe, 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 61 S. Ct. 339 (1940)). The "other considerations" which the Court must take into account include "the burden on the defendant, the interests of the forum State, and the plaintiff's interest in obtaining relief." Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113, 94 L. Ed. 2d 92, 107 S. Ct. 1026 (1987). An additional concern is present in this case because Mr. Bukele is a citizen of a foreign country. "'Great care and reserve should be exercised when extending our notions of personal jurisdiction into the international field.'" Id. at 115 (quoting United States v. First Nat'l City Bank, 379 U.S. 378, 404, 13 L. Ed. 2d 365, 85 S. Ct. 528 (1965) (Harlan J., dissenting)).

relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive. There may also be questions as to the enforceability of a judgment if one is obtained.

Id.

The public interests relevant to the determination include the administrative burden on congested courts, the imposition of jury duty on citizens in a community which has no relation to the action, the local interest in deciding localized controversies, and the appropriateness of having a court in a forum that "is at home with the . . . law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself." Id. at 508-09.

A district court has discretion and "'substantial flexibility'" when considering these factors. Wilson v. Humphreys (Cayman) Ltd. 916 F.2d 1239, 1245 (7th Cir. 1990) (citing Van Cauwenberghe v. Biard, 486 U.S. 517, 529, 100 L. Ed. 2d 517, 108 S. Ct. 1945 (1988). Nevertheless, a plaintiff's choice of forum should be given deference, particularly in a case such as this one where a United State corporation has chosen its home forum to pursue its action. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255, 70 L. Ed. 2d 419, 102 S. Ct. 252 (1981). The defendant must overcome this presumption by demonstrating that the "private and public interest factors clearly point towards trial in the alternative forum." Macedo v. Boeing Co., 693 F.2d 683, 688 (7th Cir. 1982). Despite this burden, "[a] citizen's choice of forum should not be given dispositive weight. . . . As always, if the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court, dismissal is proper." Piper Aircraft, 454 U.S. at 256 n.23 (citations omitted).

In the instant case, a trial in this forum would be unnecessarily burdensome for both Mr. Bukele and the Court. As a threshold matter, an adequate alternative forum must exist in which McDonald's could pursue this case. That forum may be found in El Salvador, where, as discussed later, McDonald's presently is prosecuting a suit against Mr. Bukele related to the operation of another restaurant. McDonald's Resp. at 6. McDonald's has not argued that El Salvador would be an inadequate forum in this case.

A. Private Interests

The private factors in this case favor dismissal. Although McDonald's witnesses reside in Illinois or would be willing to come to Illinois to testify, Figliulo Aff. P 1, none of Mr. Bukele's witnesses reside in the United States, and most of them reside in El Salvador and other Central American countries. Bukele Aff. 10/21/96 PP 11-12. Hence, this Court would lack the ability to compel testimony from these witnesses. Moreover, even if witnesses were willing to testify, the cost of obtaining their testimony would be prohibitive, both in terms of travel and translation of their testimony from Spanish to English.
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Contrary to McDonald's arguments, the testimony of many of Mr. Bukele's witnesses probably will be necessary to resolve this dispute. McDonald's has argued that Mr. Bukele's interpretation of the claims in this suit is overly broad. It claims that Mr. Bukele has no need to present witnesses regarding his compliance with the terms of the licenses because the case is simply about the continued operation of the restaurants after the licenses expired and the resulting damages. McDonald's argument, however, tries to advance both its own claims as well as limit the defenses which Mr. Bukele may present. This it cannot do.

Mr. Bukele has stated that he intends to contest the validity of the termination of the licenses by McDonald's in light of their 1994 agreement. Id. PP 9-10. McDonald's alleges that Mr. Bukele had not performed his obligations under the 1994 agreement. Specifically McDonald's claims that Mr. Bukele and Servipronto were using frozen beef patties and several other products that did not conform to McDonald's specifications and that the store remodeling process had not been completed satisfactorily. Complaint P 25(b)(c)(e)(f).

Mr. Bukele asserts that he was in compliance with the 1994 agreement and is entitled to present proof of his compliance to demonstrate that McDonald's termination was unjustified. To that end, Mr. Bukele has named several witnesses, including his suppliers for the raw food products and the architect working on renovating the stores in San Salvador, who will testify on his behalf. (Bukele Aff. 10/21/96 PP 10-12). All of these witnesses, however, live outside of the United States. Id. McDonald's proposed solution to the foreign witness problem does not change the Court's analysis. McDonald's suggests that foreign witness' testimony may be received through depositions and the letters rogatory process. Even if these forms of testimony were as desirable as live testimony, the possibility of losing key testimony due to an inability to compel cooperation will remain if this suit proceeds in the Northern District. Martin v. Vogler, 1993 U.S. Dist. LEXIS 15878, No. 93 C 3870, 1993 WL 462853, at *3 (N.D. Ill. Nov. 9, 1993). Thus, the lack of availability of compulsory process over many of the witnesses and the expense involved in securing their testimony is a significant factor pointing toward dismissal. See Maljack Productions, Inc. v. British Pathe News Ltd., 1994 U.S. Dist. LEXIS 8013, No. 93 C 7767, 1994 WL 270268, at *6 (N.D. Ill. June 15, 1994) (dismissing case on forum non conveniens grounds where defendant's witnesses were located in foreign country even though plaintiff's witnesses were located in the United States).

In addition, a view of the premises may be necessary or at least helpful in this case. Many of McDonald's problems with Mr. Bukele's operation of the restaurants relate to the physical facilities and interior design of the buildings. Complaint, Ex. A PP 1, 4, Ex. B. In fact, the 1994 agreement specified certain actions that Mr. Bukele agreed to take with respect to remodeling and upgrading the physical facilities in return for McDonald's re-writing the licenses. Id. Ex. A. P 4. McDonald's did not believe that Mr. Bukele had met these conditions, and presumably that is the reason it terminated the licenses. Id. Ex. B. Mr. Bukele, however, contends that he did meet these conditions.

Furthermore, McDonald's is seeking injunctive relief as well as damages. Even if this Court issued an injunction against the defendants' continued operations, McDonald's would need to resort to the El Salvadoran courts in order to obtain actual relief in El Salvador.

This Court has no familiarity with the law involved in this case. The 1978 licenses at issue in this case contain a choice of law provision stating that they are governed by El Salvadoran law.
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See McDonald's Response to Motion to Dismiss for Lack of Personal Jurisdiction, Ex. D, No. 3. When necessary, a court can interpret and apply foreign laws to a controversy, and "the application of foreign law alone does not suffice to justify dismissal for forum non conveniens. . . ." Martin, 1993 U.S. Dist. LEXIS 15878, 1993 WL 462853 at *4. In the case at bar, however, application of foreign law is not necessary because this case can be handled by an El Salvadoran court. Moreover, if this case were to remain before this Court, the laws of El Salvador, a civil law country, would have to be translated, or, at the least, made the subject of expert testimony, prior to any interpretation or application of those laws. See Interpane Coatings v. Australia and N.Z. Banking Group Ltd., 732 F. Supp. 909, 917 (N.D. Ill. 1990). Therefore, the application of El Salvadoran law by this Court would "impose[] a heavy burden . . . and render[] litigation substantially more inconvenient." Martin, 1993 U.S. Dist. LEXIS 15878, 1993 WL 462853 at *4.
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Thus, both the private and public interests reveal that El Salvador would be a better forum for this case. Mr. Bukele has carried his burden, and his motion to dismiss for forum non conveniens is granted.
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